Waters Corporation (NYSE: WAT) Reports Third Quarter 2026 Financial Results

Waters Corporation and Subsidiaries

Consolidated Statements of Operations

(In millions, except per share data)

(Unaudited)

Three Months Ended

Nine Months Ended

October 3, 2026

September 27, 2025

October 3, 2026

September 27, 2025

Net revenue

$                 1,767

$                    800

$                 4,678

$                    2,233

Costs and operating expenses:

Cost of revenue ^(a)

879

328

2,470

926

Selling and administrative expenses 

398

214

1,187

586

Research and development expenses 

106

54

324

149

Purchased intangibles amortization ^(b)

244

12

640

36

Restructuring charges

12

–

64

4

Operating income (loss)

128

192

(6)

532

Other income, net

–

–

1

1

Interest expense, net

(53)

(22)

(150)

(42)

Income (loss) from operations before income taxes

74

170

(155)

491

Benefit (provision) for income taxes

7

(21)

28

(73)

Net income (loss)

$                      81

$                    149

$                   (127)

$                       417

Net income (loss) per basic common share

$                   0.83

$                   2.50

$                  (1.37)

$                      7.02

Weighted-average number of basic common shares

98,255

59,528

92,751

59,496

Net income (loss) per diluted common share

$                   0.82

$                   2.50

$                  (1.37)

$                      7.00

Weighted-average number of diluted common shares and equivalents

98,653

59,622

92,751

59,656

(a) Cost of revenue for the three months and nine months ended October 3, 2026 includes $80 million and $333 million, respectively, of purchase accounting adjustments related to the fair value inventory and fixed asset step up related to the BDS acquisition.  

(b) Purchased intangibles amortization for the three and nine months ended October 3, 2026 includes $232 million and $603 million, respectively, of purchase accounting adjustments related to the amortization of the BDS acquisition purchased intangibles.

Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP

Revenue by Operating Segment, Product & Service, and Geography

Three Months Ended October 3, 2026 and September 27, 2025

(In millions)

Three Months Ended

Reported

October 3, 2026

September 27, 2025

Growth

REVENUE – OPERATING SEGMENT

Analytical Sciences Division (ASD)

$

703

$

649

8 %

Biosciences Division (WBD)

396

–

**

Advanced Diagnostics Division (ADx)

575

64

797 %

Materials Sciences Division (MSD)

93

87

7 %

Total Revenue

$

1,767

$

800

121 %

REVENUE – PRODUCT & SERVICE

Product

$

1,334

$

500

167 %

Service

433

300

44 %

Total Revenue

$

1,767

$

800

121 %

REVENUE – GEOGRAPHY

Asia

$

495

$

270

83 %

Americas

749

293

156 %

Europe

523

237

120 %

Total Revenue

$

1,767

$

800

121 %

Reconciliation of Organic Revenue Growth

Total Reported Revenue (GAAP)

$

1,767

$

800

121 %

Acquired Business Contribution

896

Total Organic Reported Revenue

$

871

Organic Reported Revenue Growth

9 %

Currency Translation Impact

(1 %)

Organic Constant Currency Revenue Growth ^(a)

10 %

Reconciliation of Reported Revenue to Prior Year Comparable Revenue ^(b)

Acquired Business Contribution

$

896

$

885

1 %

Reconciliation of Analytical Sciences Division Revenue

ASD Instrument Revenue

$

282

$

257

9 %

Currency Translation Impact

(1 %)

Constant Currency ASD Instrument Revenue Growth

10 %

ASD Chemistry Consumables Revenue

$

157

$

143

10 %

Currency Translation Impact

(2 %)

Constant Currency ASD Chemistry Consumables Revenue Growth

12 %

ASD Revenue

$

703

$

649

8 %

Currency Translation Impact

(1 %)

Constant Currency ASD Revenue Growth

9 %

**Percentage not meaningful

(a)

The Company believes that referring to comparable organic constant currency growth is a useful measure for evaluating the underlying performance of revenue. Organic constant currency revenue growth, a non-GAAP financial measure, measures the change in net revenue between current and prior year periods, excluding the impact of foreign currency exchange rate changes during the current period and excluding the impact of acquisitions completed within twelve months of the acquisition  date. See description of non-GAAP financial measures contained in this release.

(b)

The Company believes that referring to comparable revenue is a useful measure for evaluating the underlying performance of the business following the acquisition of Biosciences & Diagnostic Solutions (“BDS”).  Comparable revenue includes BDS revenue in both the current and prior year comparison periods.  Current period revenue includes BDS revenue for the full quarter and prior year comparable revenue includes an estimate of BDS revenue for the equivalent prior year period. Growth rates are calculated using these comparable revenues.

Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP

Revenue by Operating Segment, Product & Service, and Geography

Nine Months Ended October 3, 2026 and September 27, 2025

(In millions)

Nine Months Ended

Reported

October 3, 2026 ^(b)

September 27, 2025

Growth

REVENUE – OPERATING SEGMENT

Analytical Sciences Division (ASD)

$

1,979

$

1,810

9 %

Biosciences Division (WBD)

996

–

**

Advanced Diagnostics Division (ADx)

1,445

180

705 %

Materials Sciences Division (MSD)

258

243

6 %

Total Revenue

$

4,678

$

2,233

110 %

REVENUE – PRODUCT & SERVICE

Product

$

3,473

$

1,374

153 %

Service

1,205

859

40 %

Total Revenue

$

4,678

$

2,233

110 %

REVENUE – GEOGRAPHY

Asia

$

1,294

$

757

71 %

Americas

1,945

829

135 %

Europe

1,439

647

122 %

Total Revenue

$

4,678

$

2,233

110 %

Reconciliation of Organic Revenue Growth

Total Reported Revenue (GAAP)

$

4,678

$

2,233

110 %

Acquired Business Contribution

2,233

Total Organic Reported Revenue

$

2,445

Organic Reported Revenue Growth

10 %

Currency Translation Impact

(0 %)

Organic Constant Currency Revenue Growth ^(a)

10 %

Reconciliation of Acquired Company Prior Year Comparable Revenue for Period Owned ^(c)

Prior Year Full Year-To-Date Revenue

$

2,460

Less: Revenue Adjustments for Pre-Owned Period

307

Current and Prior Year Comparable Revenue 

$

2,233

$

2,153

4 %

**Percentage not meaningful

(a)

The Company believes that referring to comparable organic constant currency growth is a useful measure for evaluating the underlying performance of revenue. Organic constant currency revenue growth, a non-GAAP financial measure, measures the change in net revenue between current and prior year periods, excluding the impact of foreign currency exchange rate changes during the current period and excluding the impact of acquisitions completed within twelve months of the acquisition  date. See description of non-GAAP financial measures contained in this release.

(b)

Waters Corporation revenue for the nine months ended October 3, 2026 includes the results of the BDS Business acquisition from date of acquisition February 9, 2026 through October 3, 2026.

(c)

The Company believes that referring to comparable revenue is a useful measure for evaluating the underlying performance of the business following the acquisition of Biosciences & Diagnostic Solutions (“BDS”).  Comparable revenue includes BDS revenue in both the current and prior year comparison periods.  Current period revenue includes BDS revenue from February 9, 2026, the acquisition date, through quarter-end. Prior year comparable revenue includes an estimate of BDS revenue for the equivalent prior year period. Growth rates are calculated using these comparable revenues.

Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP Financials

Three and Nine Months Ended October 3, 2026 and September 27, 2025

(In millions, except per share data)

Operating

Income (Loss)

Benefit

Diluted

Selling &

Research &

Operating

Income

Interest

before

(Provision)

Earnings

Cost of

Administrative

Development

Income

(Loss)

Expense,

Income

 for Income

Net Income

(Loss)

Revenue

Expenses ^(a)

Expenses

(Loss)

Percentage

Net

Taxes

Taxes

(Loss)

per Share ^(h)

Three Months Ended October 3, 2026

GAAP

$

879

$

654

$

106

$

128

7.2 %

$

(53)

$

74

$

7

$

81

$

0.82

Adjustments:

Purchased intangibles amortization and acquisition-related fair value step-ups ^(b)

(80)

(243)

–

323

18.3 %

–

323

(64)

259

2.62

Restructuring costs and certain other items ^(c)

–

(20)

–

20

1.1 %

–

20

(4)

16

0.16

ERP implementation and transformation costs ^(d)

–

(7)

–

7

0.4 %

–

7

(2)

5

0.05

Acquisition related costs ^(e)

(18)

(35)

(1)

54

3.1 %

–

54

(10)

44

0.44

Adjusted Non-GAAP

$

781

$

349

$

105

$

532

30.1 %

$

(53)

$

478

$

(74)

$

404

$

4.10

Three Months Ended September 27, 2025

GAAP

$

328

$

226

$

54

$

192

24.0 %

$

(22)

$

170

$

(21)

$

149

$

2.50

Adjustments:

Purchased intangibles amortization ^(b)

–

(12)

–

12

1.5 %

–

12

(3)

9

0.15

Restructuring costs and certain other items ^(c)

–

(1)

–

1

0.2 %

–

1

(0)

1

0.02

ERP implementation and transformation costs ^(d)

–

(6)

–

6

0.8 %

–

6

(2)

5

0.08

Acquisition related costs ^(e)

–

(27)

(4)

31

3.8 %

–

31

(2)

28

0.47

Financing costs ^(g)

–

–

–

–

–

14

14

(3)

11

0.18

Adjusted Non-GAAP

$

328

$

180

$

50

$

242

30.3 %

$

(8)

$

235

$

(32)

$

203

$

3.40

Nine Months Ended October 3, 2026

GAAP

$

2,470

$

1,891

$

324

$

(6)

(0.1 %)

$

(150)

$

(155)

$

28

$

(127)

$

(1.37)

Adjustments:

Purchased intangibles amortization and acquisition-related fair value step-ups ^(b)

(333)

(640)

–

973

20.8 %

–

973

(154)

819

8.80

Restructuring costs and certain other items ^(c)

–

(75)

–

75

1.6 %

–

75

(11)

64

0.69

ERP implementation and transformation costs ^(d)

–

(25)

–

25

0.5 %

–

25

(4)

21

0.22

Acquisition related costs ^(e)

(18)

(155)

(3)

176

3.8 %

–

176

(28)

147

1.58

Financing costs ^(g)

–

–

–

–

–

4

4

(1)

4

0.04

Adjusted Non-GAAP

$

2,118

$

997

$

321

$

1,242

26.5 %

$

(146)

$

1,097

$

(170)

$

927

$

9.96

Nine Months Ended September 27, 2025

GAAP

$

926

$

626

$

149

$

532

23.8 %

$

(42)

$

491

$

(73)

$

417

$

7.00

Adjustments:

Purchased intangibles amortization ^(b)

–

(36)

–

36

1.6 %

–

36

(9)

27

0.46

Restructuring costs and certain other items ^(c)

–

(6)

–

6

0.3 %

–

6

(1)

4

0.07

ERP implementation and transformation costs ^(d)

–

(14)

–

14

0.6 %

–

14

(3)

10

0.18

Acquisition related costs ^(e)

–

(41)

(4)

45

2.0 %

–

45

(5)

40

0.67

Retention bonus obligation ^(f)

–

(3)

(1)

4

0.2 %

–

4

(1)

3

0.05

Financing costs ^(g)

–

–

–

–

–

14

14

(3)

11

0.18

Adjusted Non-GAAP

$

926

$

527

$

144

$

636

28.5 %

$

(28)

$

609

$

(96)

$

514

$

8.60

(a)

Selling & administrative expenses include purchased intangibles amortization and restructuring and other charges.

(b)

The purchased intangibles amortization and acquisition-related inventory and fixed asset fair value step-ups, which are non-cash expenses, were excluded to be consistent with how management evaluates the performance of its core business against historical operating results and the operating results of competitors over periods of time.

(c)

Restructuring costs and certain other items were excluded as the Company believes that the cost to consolidate operations, reduce overhead, and certain other income or expense items are not normal and do not represent future ongoing business expenses of a specific function or geographic location of the Company.

(d)

ERP implementation and transformation costs represent costs related to the Company’s initiative to transition from its legacy enterprise resource planning (ERP) system to a new global ERP solution with a cloud-based infrastructure. These costs, which do not represent normal or future ongoing business expenses, are one-time, non-recurring costs related to the establishment of our new global ERP solution that were determined to be non-capitalizable in accordance with accounting standards.

(e)

Acquisition related costs include all incremental costs incurred to effect the business combination, such as advisory, legal, accounting, tax, valuation, other professional fees, and integration costs. The Company believes that these costs are not normal and do not represent future ongoing business expenses.

(f)

In connection with the Wyatt acquisition, the Company recognized a two-year retention bonus obligation that is contingent upon the employee’s providing future service and continued employment with Waters. The Company believes that these costs are not normal and do not represent future ongoing business expenses.

(g)

Financing costs relate to certain financing fees incurred by the Company to secure access to certain debt facilities in connection with the agreement Waters entered into to acquire the Biosciences and Diagnostics Solutions business of Becton, Dickinson & Company. The Company believes that these costs are not normal and do not represent future ongoing business expenses. 

(h)

Adjusted diluted earnings per share is calculated using diluted weighted‑average shares outstanding of 93.1 million for the nine months ended October 3, 2026. While the Company reported a GAAP net loss for the period and therefore excluded potentially dilutive securities from its GAAP diluted earnings per share calculation, adjusted net income was positive for the period. Accordingly, potentially dilutive securities were included in the calculation of adjusted diluted earnings per share.

Waters Corporation and Subsidiaries

Preliminary Condensed Unclassified Consolidated Balance Sheets

(In millions and unaudited)

October 3, 2026

December 31, 2025

Cash and cash equivalents

$                       593

$                       588

Accounts receivable

1,464

829

Inventories

1,324

572

Property, plant and equipment, net

1,458

642

Intangible assets, net

8,275

558

Goodwill

9,369

1,340

Other assets

1,632

548

   Total assets

$                  24,115

$                    5,077

Notes payable and debt

$                    5,133

$                    1,407

Other liabilities

3,691

1,108

Total liabilities

8,824

2,515

Total stockholders’ equity

15,291

2,562

   Total liabilities and stockholders’ equity

$                  24,115

$                    5,077

Waters Corporation and Subsidiaries

Preliminary Condensed Consolidated Statements of Cash Flows

Three and Nine Months Ended October 3, 2026 and September 27, 2025

(In millions and unaudited)

Three Months Ended

Nine Months Ended

October 3, 2026

September 27, 2025

October 3, 2026

September 27, 2025

Cash flows from operating activities:

Net income (loss)

$                      81

$                    149

$                  (127)

$                    417

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Stock-based compensation

22

14

67

40

Depreciation and amortization

300

53

808

154

Acquisition-related inventory and fixed assets fair value step-ups recognized

79

–

333

–

Change in operating assets and liabilities and other, net ^(b)

(384)

(28)

(785)

(123)

Net cash provided by operating activities

98

187

296

488

Cash flows from investing activities:

Additions to property, plant, equipment, and software capitalization

(43)

(25)

(131)

(74)

Cash (paid) acquired in business acquisition, net of cash received

(59)

(1)

85

(35)

Investments in unaffiliated companies

–

–

(10)

(1)

Change in deposit asset

8

–

59

–

Net cash (used in) provided by investing activities

(94)

(26)

3

(110)

Cash flows from financing activities:

Proceeds from debt issuances 

320

–

4,062

70

Payments on debt

(275)

(50)

(4,315)

(290)

Payments of debt issuance costs

–

(18)

(28)

(23)

Proceeds from stock plans

10

3

26

16

Purchases of treasury shares

(1)

0

(15)

(15)

Other cash flow from financing activities, net

3

0

(9)

1

Net cash provided by (used in) financing activities

57

(66)

(279)

(241)

Effect of exchange rate changes on cash and cash equivalents

(7)

(4)

(15)

(4)

Increase in cash and cash equivalents

54

92

5

134

Cash and cash equivalents at beginning of period

539

367

588

325

Cash and cash equivalents at end of period

$                    593

$                    459

$                    593

$                    459

Reconciliation of Free Cash Flow – Adjusted Non-GAAP ^(a)

Net cash provided by operating activities – GAAP

$                      98

$                    187

$                    296

$                    488

Adjustments:

Additions to property, plant, equipment, and software capitalization

(43)

(25)

(131)

(74)

Tax reform payments

–

–

–

120

Litigation settlements paid, net

5

(2)

4

(2)

Payment of Wyatt retention bonus obligation ^(c)

–

–

–

20

Change in deposit asset ^(d)

8

–

59

–

Free Cash Flow – Adjusted Non-GAAP

$                      68

$                    160

$                    228

$                    552

(a)

The Company defines free cash flow as net cash flow from operations accounted for under GAAP less capital expenditures and software capitalizations plus or minus any unusual and non recurring items. Free cash flow is not a GAAP measurement and may not be comparable to free cash flow reported by other companies.

(b)

Includes an increase in net receivables of $17 million and $174 million for the three and nine months ended October 3, 2026, respectively, due from the BDS acquisition TSA provider related to the initial net cash settlement for activities occurring since the acquisition date.

(c)

During the nine months ended September 27, 2025, the Company made retention payments under the Wyatt retention bonus program. The Company believes that these payments are not normal and do not represent future ongoing business expenses.

(d)

As part of the BDS acquisition, a portion of the total consideration paid was reflected as a deposit asset on the opening balance sheet, which is attributable to the Company’s present right to the future economic benefits of the business in those foreign jurisdictions where legal and beneficial title had not transferred to the Company as of February 9, 2026. Changes in the deposit asset are driven by changes in the underlying assets and liabilities in those foreign jurisdictions, which represent productive assets and therefore the cash payments (or cash receipts) resulting from the changes in these productive assets are classified as investing cash flows. The change in the deposit asset is primarily related to the collection of third party customer receivables that existed as of February 9, 2026.  The Company considers cash collected from customers as a component of free cash flow as it represents amounts collected from its core operations.

Waters Corporation and Subsidiaries

Reconciliation of Projected GAAP to Adjusted Non-GAAP Financial Outlook

(In millions, except per share data)

Twelve Months Ended

Three Months Ended

December 31, 2026

December 31, 2026

Range

Range

Projected Revenue

Reported revenue

$          6,479

–

$          6,497

$          1,801

–

$          1,819

Acquired business contribution

$          3,050

–

$          3,050

$             817

–

$             817

Organic reported revenue

$          3,429

–

$          3,447

$             984

–

$          1,002

Organic reported revenue growth

8.4 %

–

8.9 %

5.5 %

–

7.5 %

Currency translation impact

(0.7 %)

–

(0.7 %)

(1.5 %)

–

(1.5 %)

Organic constant currency revenue growth ^(a)

9.1 %

–

9.7 %

7.0 %

–

9.0 %

Range

Range

Projected Earnings Per Diluted Share

Adjusted earnings per share

$          14.60

–

$          14.70

$            4.58

–

$            4.68

(a)

Organic constant currency revenue growth, a non-GAAP financial measure, measures the change in net revenue between current and prior year periods, excluding the impact of foreign currency exchange rates during the current period and excluding the impact of acquisitions made within twelve months of the acquisition close date. These amounts are estimated at the current foreign currency exchange rates and based on the forecasted geographical revenue in local currency, as well as an assessment of market conditions as of the date of this press release, and may differ significantly from actual results.

These forward-looking adjustment estimates do not reflect future gains and charges that are inherently difficult to predict and estimate due to their unknown timing, effect and/or significance.